Gold Rises as US Dollar Slips – Fiscal Stimulus Developments Support
Early on Monday, gold prices are on the rise after touching the lowest levels seen in eight months last week, supported by a weakness in the dollar and developments in the next round of stimulus measures in the US. At the time of writing, GOLD is trading at a little above $1,750.
During the previous session, the yellow metal prices slipped to around $1,716 – the lowest levels touched since June 2020. In addition, gold saw the worst monthly performance in over five years during February as US Treasury yields touched one-year highs.
However, on Monday, the safe haven appeal of gold has received a boost after the US stimulus bill was passed by the House. The possibility of more fiscal stimulus has driven weakness in the dollar as well, lending the precious metal further support.
However, gains in gold remain limited as markets witness a rise in government bond yields across the US, Germany and Australia, which have increased the opportunity cost of holding non-yielding bullion. In addition, the US CDC approving Johnson & Johnson’s COVID-19 vaccine for use has also improved the risk appetite among investors and dented the appeal of the precious metal.
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